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Weekly Survey of Gold and Silver Prices Single Ounce Silver Market Price Benchmark Money Daily has been providing business and financial market news, views, and coverage on a nearly continuous basis since 2006. Complete archives are available at moneydaily.blogspot.com.
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53 Years of the Dollar Standard Friday, August 16, 2024, 9:30 am ET On August 15, 1971, the USA ceased redeeming dollars for gold. President Nixon made the announcement live to a U.S. television audience and the world that the United States was temporarily suspending the convertibility of dollars into gold. The action was far from temporary. It became permanent as the world gradually shifted from a fixed rate gold standard to floating rates of fiat currencies, or, money substitutes. The price of gold had been fixed at $35 per ounce, but speculators were trading it at as much as $42 per ounce in London and other financial capitals. As of August 15, 2024, the price of gold was approximately $2,470.00 per ounce. It has compounded at a rate of approximately 7.93% for 53 years. The dollar has lost 98.25% of its value against gold. The dollar is now 1.75% of its value against gold when compared to 1971. A base 1971 Ford Mustang fastback retailed for around $3,000 in 1971. In 2024, that model now has an MSRP of roughly $36,000, 12 times more expensive. Other interesting comparisons:
Shocking? It's safe to say that untethering the U.S. dollar from gold has increased the size of government to outrageous proportions and the cost of just about anything has increased nearly exponentially. The federal government alone has increased its annual spending by 3,235%. Is living in America 3,235 times better than it was in 1971. While the price of a new home has increased by 1,457%, median household income has increased by only 826%, and household income today requires two wage earners, when in 1971, it was typically only one. The dollar standard has tipped the scales of wealth heavily in favor of the top 10%, and especially the top one percent. It's been an unmitigated disaster for the middle and lower classes. Everything from food to clothing to housing to energy needs has become nearly unaffordable for vast swaths of Americans. Stocks are up 4,336% over the past 50 years, most of that attributable directly to inflation, not real profits using real money, which is gold. Baby Boomers are likely to be the last to have a standard of living that is better than the previous generation. Generations X, Y, Millennials, and Z are likely to suffer from hyperinflation, high taxation, stifled free speech, theft of their wealth and their labor, resulting in a standard of living far below that of prior generations. Now, as for stocks, the major indices have had a week of unrivaled gains. Through Thursday's close, the Dow has gained 1065 points (2.70%). The NASDAQ is up 849 points (5.07%), while the S&P 500 is higher by 199 points (3.72%). Bitcoin, who some argue should replace the U.S. dollar, fell from $61,400 on Thursday, to as low as $56,400 overnight. WTI crude oil is also down, peaking Thursday at $77.34 before dropping to as low as $74.84. Gold has just now made a new all-time high at $2,527 on the COMEX. Even silver is getting a bid, currently rising, at $28.70 per ounce. For those of us old enough to remember, the days since Nixon, the 70s inflation, and all the rest of the turbulence has been a series of booms and busts, some of it OK, most of it troubling, and it seems not to be ending, but getting worse. Here's old "Tricky Dicky" killing the gold standard back in 1971:
At the Close, Friday, August 15, 2024:
Thursday, August 15, 2024, 9:08 am ET Now that the market has made the most of the benign July inflation numbers, showing prices rising only moderately for producers and consumers alike, Thursday brings forward July retail sales and the latest weekly unemployment claims. Also apparent is that the anticipated retaliation by Iran against Israel has been postponed indefinitely, keeping a lid on the price of oil and gold. Silver, having now been relegated by the global banking cabal to an industrial metal of little circumstance, is another story altogether. Its day shall come, but not today, and probably not until there is a seismic shift in thinking about what actually constitutes money. After the close Wednesday, Cisco Systems (CSCO) reported earnings for its fiscal fourth quarter with revenue down 10%, though ahead of estimates, at $13.6 billion and EPS of 87 cents. The company also announced planned layoffs of about seven percent of its workforce. Some 6,300 employees will be furloughed. Wall Street was enamored with the numbers, the layoffs (lower headcount, higher profits), and Cisco's forecast of increasing sales. Shares are up some seven percent in the pre-market. WalMart (WMT) also released earnings for the second quarter before the bell on Thursday, posting results that beat expectations of 65 cents per share by two cents (0.67). Shares of the world's largest brick-and-mortar retailer are up more then seven percent, heading towards a record high, in pre-market trading. Same-store and online sales were the main drivers, with U.S. sales up 4.2%, and online sales up 22% from a year earlier. As the two Dow components - Cisco and WalMart - got a head start, Dow futures were soaring, up 135 points, prior to the release of July retail sales. Calls for the Fed to cut interest rates at the September 17-18 FOMC meeting continue to grow louder with every passing data dump or earnings release. For its part, the Fed hasn't tipped its hand, though it is widely assumed that at least 25 basis points will be trimmed from the federal funds rate, which has stood at 5.25-5.50% for more than a year. Considering that inflation, according to the CPI is still running at an annual rate of three percent, and everybody's shopping at WalMart, paying increased prices for everything from bananas to beach towels, the U.S. economy seemingly clicking on all cylinders as second quarter GDP was a robust 2.8%, why in the world would the Fed cut interest rates? It would be a grievous policy error that would likely re-ignite inflation and send prices for goods and services soaring again as the U.S. government, led by the insipid morons in congress continue to spend money they don't have and will never pay back. The answer lies in reading the tea leaves surrounding the U.S. general election, increased profits for Wall Street and the nature of the Federal Reserve, which, as an international banking cartel, could care less about the U.S. consumer or the debt load of the government. Their main focus is on maintaining U.S. primacy as the world's reserve currency and keeping billions of people and most of the world's governments in perpetual debt servitude. They don't really want to fight inflation. They love inflation. It makes stealing the wealth and labor of their minions much easier and more lucrative. Thus, when July retail sales were announced at plus one percent (+1.00%), futures jumped even higher. Dow futures more than doubled, up more than 320 points. NASDAQ futures were up 180 points, with S&P futures ramping up 43 points. As an afterthought, initial unemployment claims came in lower than expected, at 227,000 for the week ending August 10. So, there you have it. The narrative has changed over the past few weeks from "rate cuts because the economy is failing" to "rate cuts because there might be a recession" to "rate cuts no matter what, for no good reason." It's lunacy. Expect to pay more for everything until the Fed's charter is revoked and congress decides to balance the federal budget. In other words, forever. Start practicing the words "President Kamala", because you know that's where this is all headed. Lest we forget, today marks the 53rd anniversary of then-president Richard M. Nixon taking the U.S. and the world off the gold standard and onto the dollar standard. His supposedly "temporary" adjustment has run its course.
At the Close, Wednesday, August 14, 2024:
Wednesday, August 14, 2024, 9:12 am ET Tuesday's rally was truly a sight to behold. The S&P and NASDAQ ripped through resistance early and the Dow followed later in the session. The Fed has conquered inflation! On to the rate cuts! Meanwhile, gold sits near all-time highs. The NASDAQ is less than 1500 points from its all-time high. In Japan, the NIKKEI is still in correction, as is France's CAC-40. How long these indices can remain depressed will depend largely upon Wednesday's U.S. CPI report for July. It is a marvel of modern economics how the entire planet's equity markets all respond in the same manner to small movements in the rate of inflation, or unemployment. It's a macro world. At 8:30 am ET, the BLS released the number. Here's what they said:
CONSUMER PRICE INDEX - JULY 2024 Sounds good enough for another 400 points on the NASDAQ, right? No? Futures appear confused and unconvinced. The next FOMC meeting - the one at which everybody in the world believes the Fed will cut the federal funds rate by a staggering 0.25% - is September 17-18. Prior to that, August Non-Farm Payrolls will be released (September 6).
At the Close, Tuesday, August 13, 2024:
Tuesday, August 13, 2024, 9:45 am ET After the manic, panicky trading of last week, traders took a break Monday, apparently holding steady and not initiating new positions until the release of July PPI and CPI on Tuesday and Wednesday, respectively. Thus, the major indices remain stuck in limbo, just below resistance levels set at the closing bell on August 2nd, though the NASDAQ managed ot exceed that by four points right before the close Monday. The waiting game came to an abrupt end at 8:30 am ET when the BLS released July PPI, showing an increase of 0.1% for the month, with goods up 0.6% and services falling 0.2%. Prices for final demand less foods, energy, and trade services advanced 0.3 percent in July after increasing 0.1 percent in June. For the 12 months ended July, this index advanced 3.3 percent. Taking out trade services, core PPI was up just 2.4% year-over-year, comparing positively with June, which was up 3.0%. On the surface, these figures are less-than-appealing to the rate cut crowd, though one wouldn't assume that by the reaction in stock futures, which shot straight up on the announcement. Strangely, so did gold, which made a new high overnight at $2,515.80 on the COMMEX continuous contract and bounced close to that level when the BLS released their July PPI figures. Of course, futures only indicate the sentiment of deep insiders and often gives a false impression of what the cash market may do once the opening bell is rung. With services falling and goods inflation taking the lead once again, the release sends signals in both directions. No matter which way one wishes to construe the argument, there's still inflation and it is remaining somewhat persistent. While Wall Street's rose-colored glass-wearers see positive developments toward lower inflation and a September rate cut, the rest of the world just sees prices gyrating higher, albeit at a slower pace. The pricing at retail is particularly disturbing. Food and energy, the main components of price inflation, continue to remain stubbornly high while wages have not kept pace, so much so that Americans now owe a record $1.14 trillion on their credit cards, the Federal Reserve Bank of New York reported last Tuesday. The average balance per consumer is $6,329, up 4.8% year over year, according to a separate quarterly credit industry insights report from TransUnion. Those are troubling figures, and indicate the U.S. consumer nearing a breaking point. Will Wall Street turn a blind eye to the obvious problem developing in consumer credit? Most likely. All they care about is September's rate cut, which they believe is baked into the Fed's cake. Tuesday's PPI did little to curb their enthusiasm, but Wednesday's CPI reading for July might prompt them to change their tune. For today, sentiment appears to have taken a positive turn, despite Home Depot (HD) missing its revenue targets, but beating on EPS, clocking $4.67 for the second quarter, well above estimates of $4.52. The number was just barely better than year-ago-EPS of $4.65. While institutions and brokerages are pimping stocks, anyone with eyes and ears open can see the trouble developing for the nearly-defunct former middle class, who cannot keep up with inflated prices on just about everything. At the same time, the U.S. government continues to pile on debt, as projections for fiscal 2024 are on par with last year's crippling deficit and will probably exceed it, despite there being no national emergency other than the wars the government created. Somehow, a 25 basis point cut in September doesn't seem to be all that important.
At the Close, Monday, August 12, 2024:
Sunday, August 11, 2024, 1:44 pm ET All eyes, other than those focused in the dollar:yen carry trade, were on stocks this week, the drama beginning Monday with the steepest one-day drop this year. Doug Nolan, author of the Credit Bubble Bulletin, provides context:
At Monday's intraday lows, the S&P500 was down 4.3%, the Nasdaq100 5.5%, the KBW Bank Index 5.0%, Germany's DAX Index 3.6%, France's CAC40 3.1%, UK FTSE100 3.2%, and Japan's Nikkei 225 Index 13.2%. Bitcoin was 13.8% lower at Monday's low and traded within a 16% range throughout the week. The remainder of the week was spent trying to mitigate the damage done by the "apparent" unwinding of the carry trade. Japan's stock markets rebounded quickly, the NIKKEI rising 10% on Tuesday, and flailing about below the close of Friday, August 2, the rest of the world's equity markets behaving in somewhat similar manners.
By the end of the week, despite inspired efforts of dip buyers everywhere, the major indices could not manage to exceed the resistance level set by the August 2 close. Though Monday's damage was largely undone, the Dow, NASDAQ and S&P still closed lower for the week, the fourth straight for the NASDAQ and S&P 500. Only the NYSE Composite managed weekly gains, up 104 points (+0.58%). The question now becomes rather stark and simple. Will the indices continue to bounce higher, pass through resistance levels and onward toward a brighter future, or, will the apparently serious declines of the past four weeks manifest themselves further, the NASDAQ correction emerging into a more broadly spread bear market? One might as well consult a crystal ball or magic eight ball for answers, because, truly, nobody knows, except, maybe some oracle, that moniker aptly applied to one Warren Buffett, known in certain circles as the "Oracle of Omaha." Buffett's remarkable record of being on the right side of trades for more than 50 years cannot be denied. His latest gambit being the wholesale dumping of Bank of America (BAC) and Apple (AAPL) holdings by Berkshire Hathaway over the past few months. Remembering that being early does not necessarily equate to being wrong, or right, the fact that Buffett largely rid his balance sheet of a major tech company and a financial institution should at least be a part of determining trading strategy from now until the U.S. elections in November. While it would be easy to dismiss Buffett moving his money from stocks to cash, the massive rally off Monday's lows cannot be discounted. As counter-intuitive as either side of the Buffett vs. rest of the market trade may be, one side will eventually be proven right over the long term, and possibly that's where some people are looking, expanding their horizon beyond the impatient present and deeper into an unknowable future. The market action of the past week was alarming, with the VIX rising to levels not seen since 2020, at the height of pandemic fear. By week's end, however, the financial press was largely discounting Monday's smackdown as just a little blip, maybe some overwrought fear of the unknown (Japan 10-year bonds at 0.25%), or just the usual irrational market behavior. That the financial press would react and respond in such a manner is alarming in and of itself. Any advice given or taken for the upcoming week and the weeks following toward the elections should be sprinkled liberally with grains of salt. The danger to portfolios is palpable. Those following earnings reports will note the following releases of 2nd quarter results during the week ahead. Monday: (before the open) Barrick Mining (GOLD); (after close)Rumble (RUM). Tuesday: (before) Home Depot (HD). Wednesday: (before) Cardinal Health (CAH); Dole (DOLE); (after) Cisco (CSCO). Thursday: (before) WalMart (WMT), AliBaba (BABA), John Deere (JD). Those are the biggest names that could impact sentiment overall. More important will be economic data, including PPI on Tuesday and CPI on Wednesday, both before the opening bell. Thursday's initial and ongoing unemployment claims will also be closely monitored, along with monthly readings on Industrial Production, Capacity Utilization, New York and Philly Fed indices.
It's probably safe to say that bond yields bottomed out last week (8/2) and will begin to rise on the long end as dis-inversion (normalcy) approaches. 2s-10s were actually dis-inverted for a few moments on Wednesday (8/7) for the first time in two years, closing out that day just four basis points apart, with the two-year yielding 4.00, and the 10-year at 3.96%. The week ends with an 11-point gap, a number which is more likely to proceed further negative rather than in the opposite direction now that the Fed, Wall Street, and the rest of the world saw what will happen when rates actually do normalize. The Fed, and the world, is not ready for that. Yet. But, like the sun rising in the East and falling in the West, short term rates yielding less than those of longer maturity will become the norm once again, and that day is approaching. Nothing the Fed can do, even engaging in its regular game of excessive currency debasement, can stop it from occurring. Even at the extreme inverted state of the full spectrum from 30 days out to 30 years contracted, from -143 the prior week to -131 at Friday's bond market close. Spreads:
2s-10s
Full Spectrum (30-days - 30-years)
WTI crude oil was higher this week, though not by as much as some may believe. The close Friday in New York at $75.70 was only $1.56 higher than the previous close (Aug. 2) of $74.14 and still below the close two weeks ago of $76.44. From the April high of $86.91, WTI crude ended the week down 12.90%. With summer winding down, many normal vacationers are doing "stay-cations" close to home. Work from home, hybrids, EVs, and improved fuel efficiency overall has also slowed demand for gas and crude. Sluggish economies in the U.S., Europe, and especially, China, are keeping demand at low levels. Without ongoing production curbs by OPEC+ countries, at full capacity, WTI crude would be selling for $60 a barrel or less. That's certainly not the case, as prices at the pump remain artificially higher than normal. The U.S. election looming - now just more than 12 weeks out from November 5 - the most probable direction for gas, and, by extension, crude oil, figures to be lower, though tensions in the Middle East could easily disrupt that scenario. The intersection of election politics and oil prices will continue to build. Early voting will begin as early as September 21 (Minnesota and South Dakota, 46 days before election day) and get into full swing roughly two weeks after that. States each have their own early voting rules, most set between 14 and 21 days prior to the actual "election day." Thus, the impact gas prices will have on influencing the elections will be soon felt. Gasbuddy.com reports the national average for a gallon of unleaded regular gas at the pump at $3.43 a gallon, down another three cents from last week. The general trend, true in three of the past four years, has been for gas prices to be lower in November than in August, especially so the past two years, with the exception being 2021, when the national average increased by about 20 cents. In 2022, the national average fell from $3.96 on August 11, to $3.79 on November 11. Last year, the average price fell 50 cents, from $3.84 on August 12, to $3.34 on November 12, so an expectation for the national average gas price falling below $3.25 would be reasonable. California remains #1 in the U.S. at $4.57 a gallon, the lowest Golden State price in more than six months. Pennsylvania price were up slightly, to $3.60, staying the price leader in the Northeast with New York nearby at $3.54. Connecticut ($3.49), Maine ($3.42), and Massachusetts ($3.41) were all down for the week, though Maryland prices rose to $3.49 per gallon. Prices in the Midwest continue to stabilize and fall. Illinois has dropped from just above $4.00 two weeks ago to $3.87 on Sunday. Mississippi continued having the lowest prices in the country, at $2.91 per gallon, joined under $3.00 by Oklahoma ($2.96), Louisiana ($2.97) and Tennessee ($2.98). Texas checks in at an even $3.00, with Arkansas at $3.01 and South Carolina at $3.03. Georgia ($3.20) and Florida ($3.30) both were lower on the week. The Midwest ranges between lows Kansas ($3.15) and Missouri ($3.16), to highs of $3.56 in Michigan, $3.51 in Ohio, and $3.48 in Indiana, all lower, almost all others in a range between $3.20 and $3.40. Arizona, at $3.45, remained below $4.00 for a 14th straight week, leaving only California and Washington ($4.20) above the $4.00 level. Oregon checked in at $3.84 and Nevada at $3.88, each down marginally. Utah ($3.53) and Idaho ($3.59) continue to stabilize at somewhat elevated levels.
This week: $60,524.90 OK, fine. Bitcoin basically led or followed the money flow out of and into stocks this week. Is it a Wall Street/Washington slush fund? Certainly appears to be.
Gold:Silver Ratio: 89.71; last week: 86.68 Per COMEX continuous contracts:
Gold price 7/12: $2,412.00
Silver price 7/12: $31.02 Contrary to the wishes of fiat currency purveyors, gold fell only slightly over the course of the week, recovering smartly, like stocks, from Monday's lows of $2,409.00. Silver's demise continues to confound precious metals analysts. While gold has been making record upon record the past six months, silver, although rising, is still undervalued by more than 40% from all-time high of $48.70 back in 2011. There are reasons for this, maybe, other than price manipulation by central banks, the glaringly obvious one being the massive quantities of silver being used in production of solar panels by China, and now, India. Advancements in photovoltaic cell efficiency over the past 15 years has reduced the amount of silver needed in solar panels to produce electricity, so, while solar electricity has been increasing dramatically, that rise is offset by manufacturing and scientific efficiency. That is not a worry, however. Central banks continue to seek an end to any reference of silver as currency, relegating the metal to the wants and needs of the commercial/industrial sector. There will always be demand for silver, both in industry and as currency, though, for now, industry is dominating the price debate. With the gold:silver ratio approaching the upper range close to 90, silver stackers should be dancing in the streets over their good fortune, being still able to purchase silver at a relatively reasonable price compared to gold. Twenty years ago, an ounce of silver was being bought and/or sold at prices between $5.50 and $8.29. In 2024, the high was $32.43 and the low, a stunning $22.15, a rather grand range. But, in relation to the lows and highs of 2004, the price is up 391% (highs) to 403% (lows). Generally speaking, no matter at which price anybody bought silver in 2004, the gains have far outpaced inflation. Silver, as a store of value, remains as good as, well, gold. Be not dismayed at recent under-performance. Silver is on sale and has probably been the most undervalued asset the past 200 years. Be happy. Any confusion over central banks' deep-rooted hatred of gold's cousin should now be dispelled. It's absolutely kryptonite to their fiat counterfeit. Here are the most recent prices for common one ounce gold and silver items sold on eBay (numismatics excluded, free shipping):
The Single Ounce Silver Market Price Benchmark (SOSMPB) was down significantly over the week, falling to $37.07, a drop of $1.48 from the August 4th price of $38.55 per troy ounce. The most noticeable factor in the Sunday survey of gold and silver prices on ebay was the paucity of one ounce gold coins offered for sale, either at auction (almost none) and at set prices. There are plenty of numismatic and fractional gold coins and bars, but the standard American Gold Eagle, St. Gauden's, Kruggerand, or Canadian Maple Leaf are being kept for safe keeping, not without good reason. The price of gold should exceed $5,000 within two to five years as inflation rages across Western economies. There isn't much to stop inflation from absolutely ravaging fiat currencies, as evidenced this week on the havoc caused by a 15 basis point hike in rates at the Bank of Japan. The fiat system has reached a state of fragility from which it will never recover. WEEKEND WRAP Plan wisely.
For the Week:
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